Capital flight

SANUSI Lamido Sanusi, Governor, Central Bank of Nigeria (CBN), made the startling revelation that about $11bn (N1.73trillion) moved out of the country through the nation’s airports so far this year. He spoke at an event organised by Bank Directors Association of Nigeria, in Lagos.

The CBN governor in his vintage self captures the repulsive trend: “In this country, almost everybody uses the dollar. This year alone, the records we have based on the declared amount at the airports is getting to about $11bn in cash that was taken out of Nigeria….Why would anyone walk out of an airport with $5million? Well, they will say it is because the law has made it clear that you can take any amount so long as you have declared it and I cannot stop you.’’

These figures, though scary, might be an understatement in view of the country’s poor record-keeping profile. Thence, coming from someone who should know, we feel that whatever the released documented official figures now, it is obvious that it could be higher. In effect, if legal capital flight could be as high as this, then, smuggled money through the airports could double this amount.

The pointers: Just recently, the Economic and Financial Crimes Commission, EFCC, arrested one 24 year-old Abubakar Tijani Sheriff for attempting to smuggle $7million (about N1.101billion) out of the country to Dubai, United Arab Emirates. He had escaped security scrutiny from other agencies at the airport but was apprehended at the point of boarding by operatives of the commission. During routine airport checks, he lied that he had a sum of $4.5million on him but a thorough screening showed that he was actually carrying $7,049,444 (Seven million, forty-nine thousand, four hundred and forty-four United States Dollars). Last week too, a man was reportedly arrested for attempting to smuggle $350,000 out of the country, among others too numerous to catalogue.

We are aware of reports that some Nigerian citizens are routinely arrested at airports in Europe and North America for currency smuggling. In virtually all these cases, the money is lost as they are never repatriated to the country. All these underscore the countless money smuggling acts that escaped the scrutiny of security agencies at airports across the country.

It is bad for the economy that the recorded amount of capital flight from the country outweighs its Total Foreign Direct Investment profile. The amount of money ferried out of the country this year alone, as declared by Mallam Sanusi, is more than a third of the country’s total national income. If a projected estimate of the undocumented figures siphoned abroad is added, then, it could be higher than the total national income. This portends a serious problem ahead for a country that can only boast of a mere $1billion in its Sovereign Wealth Fund.

The government should do something drastic to curtail the high rate of capital flight. The documented amount of $11billion moved through the airports to develop the economies of foreign countries is scandalous for a country that is still groping to provide employment, quality education and necessary infrastructure, etc. Perhaps, the time has come for the government to device a means that would encourage wealthy Nigerians to invest in the national economy. This can only be achieved though, with the right investment climate and political stability.